SAP plays tease over mid-market Salesforce 'killer'

SAP has doled out a handful of details on A1S, its eagerly anticipated mid-market on-demand suite, while promising to be better than Salesforce.com.

After months of teasing SAP watchers at numerous trade shows with screen shots and little else, SAP today revealed A1S would be "closer" to SAP's existing All-In-One suite, rather than Business One or SAP CRM ondemand.

A1S will target companies with 50-500 users with customer relationship management, enterprise resource planning, supply chain management and product lifecycle management. A proper name will be announced during the next few months.

SAP will sell A1S using a "multi-channel, hybrid approach", with partners encouraged to customize the software for vertical and geographic markets. The software vendor expects A1S help it hit the goal of 100,000 customers by 2010 – up from 40,000 today.

And that's all you're getting: SAP is playing its cards very close to its chest.

Speaking today at the opening of a co-innovation lab at the company's Palo Alto, California, campus, chief exec Henning Kagermann took great pains to differentiate A1S from Salesforce.com. Salesforce has set the agenda for on-demand business applications, thanks to the success of its CRM suite.

"You can't compare what Salesforce is doing with A1S. Salesforce is a piece of an on-demand suite," told press, partners and bloggers. "A1S is a complete suite."

He repeated SAP's official party line - that it is taking a mixed approach and not relying purely on software as a service (SaaS). "I don't believe that software as a service is the ultimate answer. The answer is choice for the customer, which means you need a hybrid model... let them pick which [part] they want to run as a service."

According to SAP, 65 per cent of its customers are small and mid-market users, with A1S targeting the "low-end". SAP thinks it can stratify its offering by offering Business One to companies with fewer than 50 users, All In One to those with between 500 and 1,000, and the full SAP suite for those with 1,000-plus users. No mention was made of CRM ondemand.

SAP's stance on multi-channel delivery seems designed to reassure partners that on-deman, won't be cut out of the loop, by allowing SAP to sell direct to the customer. Steve Ballmer, CEO of SAP’s partner and some-time rival Microsoft, has been candid that his company’s planned move into ondemand with Dynamics CRM Live would, harm Microsoft partners.

"Our go-to-market will cover all possible capabilities," SAP deputy CEO Leo Apotheker said. "I insist on it because not all markets are equal. What works in northern California might not work well in Bavaria or southern California. We have no intention of leaving anyone on the wayside. We want to give customers as much choice as possible." He called A1S a "whole new business model" for SAP. ®